In a recent issue, Time magazine raised the disturbing question: What effect do newspaper closings really have on a town? Or a nation?

It reports that ?depending on a person?s habits, the answers to these questions range from ?It?s death of democracy!? to ?Newspapers? What newspapers???

This question resonated in every community and city around the globe where a free and independent newspaper is published.

An essay in Time by Belinda Luscombe examines this issue in the wake of the recent demise of two major metropolitan dailies, the 149-year-old Rocky Mountain News and the almost equally venerable 145-year-old Seattle Post-Intelligencer.

For the state of the news media, read on.

On March 17, Agence France Presse reported that US newspapers were in a state ?perilously close to free fall? and time was running short for them to reinvent themselves.

The report cited a 2009 study by the Pew Research Center?s Project for Excellence in Journalism on the State of the News Media, which found that the media faced its ?bleakest? year since six years ago.

The report found that US weekly news magazines and daily newspapers were particularly troubled. ?The newspaper industry exited a harrowing 2008 and entered 2009 in something perilously close to free fall,? the report said.

Death not imminent

Nevertheless, ?we still do not subscribe to the theory that the death of the industry is imminent,? noting that the industry overall in ?2008 remained profitable.?

The report added, ?But the recession already threatens the weakest paper. Nearly all are now cutting so deeply and rapidly that simply coping with the economic downturn has become a major distraction from efforts to reinvent the economics of the business.
?If the industry is not dying, the more pertinent question may be: Can newspapers beat the clock? Can they find a way to convert their growing audience online into sufficient revenue to sustain the industry before their shrinking revenues from print fall too far??

Two developments converged in the last year that have shortened the time journalism has to reinvent its business model and secure its financial future, according to the report.

First, the audience migration to the Web accelerated substantially in 2008 ? but online ad revenue flattened and in newspapers declined. Second, the recession hammered advertising and diverted attention away from innovating new revenue sources.?

It added: ?The result of the changes of 2008 is an industry diminished, with less time and resources to finance the transition. On the other hand, the notion that traditional journalism is on the brink of extinction is overstated. The death of newspapers is not imminent, despite news of bankruptcies and even some closure. Even newspapers whose companies are in bankruptcy are profitable.?

While some US papers are abandoning print to go online, ?going all-digital is not likely to become widespread anytime soon,? the report said. ?Papers still make roughly 90 percent of their revenue from print.?

Unfilled gap

Alternative news sites were not filling the gap. As the study was being released, Hearst Corp., publisher of the Seattle Post-Intelligencer, announced that it was ending the print edition of the money-losing newspaper on March 16 and going online only.

The Seattle P-I would become the largest daily newspaper in the United States to ?shift to an entirely digital news product.? The E.W. Scripps-owned Rocky Mountain News closed down in February, leaving Denver, Colorado, with just one newspaper.

Tribune Co., owner of the Los Angeles Times, Chicago Tribune and six other papers, and several other newspaper groups have declared bankruptcy.

The 101-year-old Christian Science Monitor offered its last print edition on March 27, and, like the Seattle P-I, has gone online as a cost-cutting measure.

$11 billion, 16,000 jobs lost

US newspaper industry estimates put print advertising revenue losses for newspapers at $11 billion and the number of American reporters who lost their jobs last year at 16,000.

?The crisis in journalism has reached meltdown proportions,? Time wrote in an in-depth report.

?It is now possible to contemplate a time when some major cities will no longer have a newspaper and when magazines and network news operations will employ no more than a hundred reporters. There is, however, a striking and somewhat odd fact about this crisis.

?Newspapers have more readers than ever. Their content, as well as that of newsmagazines and other producers of journalism, is more popular than ever?even among young people.

?The problem is that fewer of these consumers are paying. Instead, news organizations are merrily giving away their news. According to the Pew Research Center study, a tipping point occurred last year: More people in the United States got their news online for free than paid for it by buying newspapers and magazines.?

Traditional revenue sources

Newspapers and magazines traditionally have three revenue sources, according to Time: Newsstand sales, subscriptions and advertising.

?The new business model relies only on the last of these,? the report says.

A glimpse of what might happen has been offered by a study by Sam Schulhofer-Wohl, a Princeton University assistant professor of economics and public affairs, and Miguel Garrido who looked at communities affected by the closing of the Cincinnati Post at the end of 2007. The finding ?is not an attractive view,? says Time.

The Pew study surveyed a limited number of subscribers (27,000) in Cincinnati and northern Kentucky. Even with those limitations, the study found ?a few trends seemed to emerge: In the towns the Post regularly covered, voter turnout dropped, fewer people ran for office and more incumbents were reelected. That is, when there were fewer stories about a given town, its inhabitants seemed to care less about how they?re being governed.?

It further found that ?it seemed that smaller towns were much less affected by newspaper closures than the larger ones. Voter turnout in the smaller communities did not change.?

Another Pew study found that fewer than half of Americans say that losing their local paper would hurt their civic life ?a lot? and even fewer say they would miss reading it, partly because they get their local news from other media, mostly TV.

Major link missing

?But since papers are the primary source for most other news outlets, a major link will be missing from the news ecosystem,? the survey found. ?If a paper does not cover a story, it is unlikely to be covered in the broadcast media, whose reporting staff tends to be even smaller.?

In a scathing finding on the so-called ?interactive citizens? journalism,? the report noted that ?while there are many bloggers in Seattle, that?s not the same as reporters.? The concern, it said, ?is that there will be more opinion and less fact-based reporting? by undisciplined and untrained bloggers.